Both the Revenue/Department as well as the Assessee have assailed a single order dated 12.08.2004, where each have taken up its respective Issued which are commonly arising in all the impugned years, so common grounds have been set forth for the years in appeal by both regarding its identical issues taken up before us. Sections referred to in this order are of the Repealed Income Tax Ordinance, 1979.
2. The Department is commonly contesting the reduction in transport business income receipts as not proper in the years. Under appeal. Contesting the deletion of addition u/s. 12(18) solely exists in assessm ent year 2000- 01. The appellant/assessee is mainly contesting the simultaneously holding valid as well as void ab initio the assessments by ignoring own clear cut findings on noticing the legal defect of combined notice u/s. 56 for all the impugned years and also thereafter single notice u/s. 61. The appellant/assessee has also contested the reduction in income as yet not sufficient.
3. Patently and undisputedly facts in brief of the case are that a single combined statutory notice u/s. 56 was issued. Thereafter single statutory notices u/ss. 58(1) and 61 for all the impugned years have also been in the same manner issued i.e. Single notice for all the impugned years.
4. Before us the learned AR at very outset cf his arguments drew the attention to the following para of the learned first appellate authority's order:-- "After perusal of assessm ent record, and following the above citations, it is held that statutory notice u/s. 56 of the Income Tax Ordinance, 1979 should have been issued separately for each year which has not been done. As proceedings have been initiated on the basis of invalid notices which is against law and ab initio void.
The learned AR by referring the para reproduced supra has forcefully submitted that the learned first appellate authority after categorically so recording the findings has expressed it very clearly where any subsequent deviation could not be possible. The learned AR has also referred to orders of this Tribunal as 2006 PCTLR 12 Lah. (Trib.) and (2004) 90 Tax 36 (Trib.) to support the contention that issuance of single combined notice for all the years has made the assessm ents as illegal. The learned AR from the order cited as (2004) 490 Tax 36 (Trib.) has read out paras 6 & 7. The learned AR has also read out paras from the other order of this Tribunal where in respect of wealth tax proceedings against the present assessee/appellant for framing the wealth tax assessme nt a single combined notice u/s. 17 of the Wealth Tax Act was issued, as a result of it the assessme nts framed were annulled by the Tribunal. The learned AR has further elaborated his arguments by firstly' submitting that it is by issuing separately single notice Rs. 56 for each impugned assessment year that proper lawful assumption of jurisdiction for exercising authority and for conducting the proceedings could be legally possible, so when the assumption of jurisdiction by when singly issuance of notice u/s. 56 has been done then exercise of authority, -the proceedings and the order should be declared null and void. The learned AR by referring to following citations with the findings in brief has drawn the support that in a situation like instant case the defect in jurisdiction caused by a single justice, u/s. 56 then the assessment order is liable to be declared as null and void:-
(i) "If the notice issued is invalid for any reason, the entire proceedings taken are void; (1971) 82 ITR 821 (SC Ind.) 1995 PTD (Trib.) 1100
(ii) Order without jurisdiction - such order alongwith super-structure must fall to ground PTCL 1996 CL 1(HC Lah.)
(iii) Combined notice for several years not valid.
2006 PCTLR 12/15 (Trib.) (2004) 90 Tax 36 (Trib.)
(iv) Jurisdiction cannot be given by consent & filing . Or return is not a waiver.
PTCL 1987 CL 353, PTCL 1990 CL 356, PTCL 2000 CL 111/140, (1990) 61 Tax 159 (HC Kar.)
(v) Jurisdiction provisions are mandatory and cannot be waived.
(1978)113 ITR 22
(vi) Where the basic order was without jurisdiction then the superstructure raised thereon would fall to ground automatically.
2002 PCTLR 957 (HC Lah.)
(vii) Jurisdiction includes assumption & exercise of jurisdiction.
PLD 1963 Kar. 551".
The learned AR also produced before us Photostat copies of statutory notices issued u/ss. 56/58 and 61 which are single but are in respect of all the impugned years.
5. The learned Legal Advisor has supported the issuance of single combined notice with the submission that it being merely a defect in the form of notice do not vitiate proceedings supported this contention by dreading out the provisions of Section 155 of the repealed Income Tax Ordinance, 1979. The learned LA has submitted that in the earlier order of this Tribunal, the findings have been recorded by not taking into consideration the provisions of Section 155 ibid so it is a matter of first impression where this Tribunal is to express itself by recording findings. The learned LA has specifically pointed out as to how the -expressed findings in para 7 of the order cited as (2004) 90 Tax 36 (Trib.) could be ignored. The learned LA submitted that by issuance of a single notice no prejudice has been caused to the appellant/assessee so notice and the proceedings are proper under the provisions of Section 56 ibid.
6. On this preliminary legal issue we have heard both sides and also perused the relevant record available on fie. The orders as cited before us have minutely been studied by us. We have gone through the provisions of Section 56 as well as of Section 155 of the repealed Income Tax Ordinance, 1979. This Tribunal in the order cited as (2004) 90 Tax 36 (Trib.) has recorded the clear cut findings while disposing of reference application filed on behalf of revenue. For convenience relevant portion from page-7 of this cited order is being reproduced as under:- "However, in our judgment, just as an assessee is required to file return of income separately for each * year so it is that statutory notice should also be issued separately for each year. Thus, where an assessee is required to file returns of income for eight years, the assessee cannot disclose lump sum income for eight years but has to bifurcate his income for each year separately and file separate returns of income on a yearly basis. The law as propriety requires that the assessing officer compute income separately for each year even when a consolidated order of assessment is passed. By calling on the assessee to file returns for eight years through a single notice followed by notice u/s. 61 for a similar period, the assessee is caused prejudice insofar as the assessee may feel constrained to explain the income arising in these eight years in a single appearance before the assessing officer. Imagine the assessee discomfiture in an accounts case where accounts and supporting documentation for many years have to be produced before the assessing officer on a single date for which a combined notice has been issued. This is certainly not what statute contemplates. The text of the statute [Section 56 of the repealed Income Tax Ordinance, 1979] unequivocally' refers to. Assessm ent in the singular. Nowhere in the statute is 'assessment' referred to in the 'plural'. We are aware that think it appropriate to read the provisions' in this manner here."
The relevant para as reproduced supra has properly dealt with the first objection of the learned LA that earlier by referring to the provisions, of Section 155 the matter has not been dilated upon. As per underlined portions of reproduced para supra the basis of prejudice and the prejudice which has been caused both have been expressed by the learned Division Bench by making us understand firstly that for each year separate return is to be filed which is to be again assessed as per each year-arid on the basis of each year, income is to be assessed, that separate tax demand is to be created. Thus the assessee is required to explain each. Year's income separately. So with such findings it has become clear that single notice has caused a prejudice and Section 155 has duly referred to the situation where no prejudice is caused. In this cited case the Tribunal has established that issuance of single combined notice has caused prejudice. The other issue which has been dealt with in this cited order of the Tribunal is firstly that the word "notice" and the words "assessm ent year" appearing in Section 56 meant only the singular and not the plural, because in this very Section reading a singular as plural would not be appropriate.
7. In the instant case before us the assessee in response to a single combined notice u/s. 56 has filed returns for each year and has become a party to the proceedings for each year before the assessing officer. The requisite details have also teen filed for each year so keeping in view the facts, we do not find any justification to agree with the contentions that any prejudice has been caused in this very instant case as per facts which are on record. We deprecate and also not approve issuance of single combined notice but with the participation by the assessee in the assessm ent proceedings the lacuna has disappeared. The appellant/assessee has waived the right to - agitate the same. So in this very instant case we do not find any illegality on subsequent joining the proceedings by the appellant/assessee. The objection of the learned AR being not tenable which is rejected and the assessment on the issuance of combined notice has to be declared in order. After becoming a party by getting completed the assessment proceedings for each independent year then objecting or) the point of issuance of single combined notice u/s. 56 would be just a hyper-technical objection because such contention could no longer be justifiable both factually and legally. The assessee has duly submitted details in respect of each year which have been discussed separately and separate tax liability has been created. Then for us little justification is left io follow the earlier findings of this Tribunal on this very issue.
10. As far as deciding the case on merit we have heard both the parties on the issue of addition u/s. 12(18) where undisputedly the transaction by transfer of amount through cheques/banking channel has taken place. The cheques have been issued by the appellant/assessee's wife to the seller of the property. It was by subsequent mutation dated October, 2001 that impugned land became the property of wife of the appellant/assessee. Admittedly the consideration for purchase of land has passed on through banking channels which fact has been not denied by the assessing officer. The learned first appellate authority by recording the following findings has deleted the addition:- "As regard the addition amounting to Rs. 23,330,000/- u/s. 12(18) of the repealed Income Tax Ordinance, 1979. It is observed that the contention of the appellant that his wife namely Mst. Halima Asia purchased agricultural land measuring 12 Acres agri. land at Chak No. 14/NP Tehsil Sadiqabad and got registered in the name of appellant for seeing issues like possession and pre-emption. On the other hand the plea of the learned Taxation Officer is that the land is owned by the appellant as he admitted before the Honourable Court of 1st Class Civil Judge, Sadiqabad in the pre-emption suit No. 391. Further, the appellant is earning income from such land as the same has been shown in wealth reconciliation statement. He added Rs. 23,330,000/- u/s. 12(18) of the repealed Income Tax Ordinance, 1979 as the appellant's wife made payment directly to the seller and it was not routed through assessee, hence, it is obvious that there is no dispute of payment of purchase consideration through cross cheque by wife of the appellant. The AR of the appellant also produced the copy of agreement between wife and husband. According to which the wife chased land measuring 127 Acres and got the same registered on the name of appellant.
After the perusal of documentary evidences produced by the appellant, case-law referred and office record of the Circle-25, Rahim yar Khan it is established that wife of the appellant purchased said land and got registered on the name of appellant. In the other words, we can. Say that she purchased said land and . Gifted the same to her husband which means the gift o was made in kind which did not fall under the purview of Section 12(18. Therefore, addition amounting to Rs.
23,330,000/- is hereby deleted.
10. So keeping in view the discussion supra and also reasons as recorded in the impugned order we maintain the deleting of addition u/s. 12(18). As far as estimation of business income is concerned which is yet to be excessive so it reduced to Rs. 45,000 for every year under appeal.
11. The departmental appeals as well as assessee's appeals are disposed of as above.